The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe - December 2013
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The economic and societal benefits deriving
from the presence of Hyundai and Kia in Europe
December 2013
About London Economics London Economics is one of Europe's leading specialist economics and policy consultancies. Based in London and with offices and associate offices in five other European capitals, we advise an international client base throughout Europe and beyond on economic and financial analysis, litigation support, policy development and evaluation, business strategy, and regulatory and competition policy. Our consultants are highly-qualified economists who apply a wide range of analytical tools to tackle complex problems across the business and policy spheres. Our approach combines the use of economic theory and sophisticated quantitative methods, including the latest insights from behavioural economics, with practical know-how ranging from commonly used market research tools to advanced experimental methods at the frontier of applied social science. We are committed to providing customer service to world-class standards and take pride in our clients’ success. For more information, please visit www.londecon.co.uk. Head Office: 71-75 Shelton Street, Covent Garden, London, WC2H 9JQ, United Kingdom. w: www.londecon.co.uk e: info@londecon.co.uk t: +44 (0)20 7866 8185 f: +44 (0)20 7866 8186 Wherever possible London Economics uses paper sourced from sustainably managed forests using production processes that meet the EU eco-label requirements. Copyright © 2013 London Economics. Except for the quotation of short passages for the purposes of criticism or review, no part of this document may be reproduced without permission.
Contents Page
Glossary iii
Hyundai Motor Group at a Glance iv
Executive summary v
1 Background and context 1
1.1 The economic context 1
1.2 The automotive sector in Europe 1
1.3 Hyundai and Kia in the EU 4
2 Contribution to employment and GDP 6
2.1 Manufacturing 6
2.2 Sale and distribution 11
2.3 Research and development 11
2.4 EU-wide impact on GDP and employment 12
3 Training and development of the labour force 13
4 Tax contributions by Hyundai and Kia in Europe 14
5 Contributions to society and corporate social responsibility 15
5.1 Hyundai Motor Manufacturing Czech (HMMC) 15
5.2 Kia Motors Slovakia (KMS) 16
5.3 Hyundai Motor Europe (HME) 16
5.4 Kia Motors Europe (KME) 18
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe i
Tables, Figures & boxes Page
Table 1: Impact of Hyundai/Kia manufacturing 6
1)
Table 2: Hyundai/Kia share of national and regional (NUTS 2) employment 7
Table 3: Hyundai/Kia share of national and regional (NUTS 2) number of persons employed in
manufacture of motor vehicles 8
1)
Table 4: Hyundai/Kia share of national and regional (NUTS 3) GDP 8
Table 5: Impact of Hyundai/Kia car parts suppliers 9
Table 6: Regional employment resulting from Hyundai/Kia supply purchases: share of national
1)
and regional employment 10
Table 7: Impact of Hyundai/Kia non-parts suppliers 10
Table 8: Impact of Hyundai/Kia sale and distribution 11
Table 9: Impact of Hyundai/Kia research and development 12
Table 10: Combined EU-wide impact of activities by Hyundai and Kia on GDP and employment 13
Table 11: Tax contributions by Hyundai and Kia in Europe (2012) 15
Figure 1: Real GDP growth rate (percentage change on previous quarter), EU27 1
Figure 2: Motor vehicle production per 1,000 inhabitants, 2012 3
Figure 3: Direct employment in the automotive sector, EU27 (2008-2012) 3
Figure 4: Average number of training hours per employee 14
London Economics
ii The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe
Glossary
Glossary
ACEA Association des Constructeurs Européens d'Automobiles
BYE Brilliant Young Entrepreneurs
CAR Center for Automotive Research
EU European Union
EVTA European Vocational Training Association
GDP Gross Domestic Product
GVA Gross Value Added
HMC Hyundai Motor Company
HMD Hyundai Motor Germany
HME Hyundai Motor Europe
HMETC Hyundai Motor Europe Technical Center
HMG Hyundai Motor Group
HMMC Hyundai Motor Manufacturing Czech
JA-YE Junior Achievement-Young Enterprise
KMC Kia Motors Corporation
KME Kia Motors Europe
KMS Kia Motors Slovakia
LFS Labour Force Survey
OEM Original Equipment Manufacturer
OICA Organisation Internationale des Constructeurs d’Automobiles
R&D Research & Development
SBS Structural Business Statistics
STEM Science, technology, engineering and mathematics
NOTE: In this report, the terms ‘Hyundai’ and ‘Kia’ refer to the companies or their products in
Europe (EU27). The scope of the report is the EU27, with the exception of some sales
and export figures that are only available at the EU+EFTA level. These cases are
explicitly stated within the report.
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe iii
Hyundai Motor Group at a Glance
Hyundai Motor Group at a Glance
Hyundai Motor Kia Motors Slovakia (KMS)
Manufacturing Czech (HMMC)
Hyundai Motor Europe (HME) Kia Motors Europe (KME)
Hyundai Motor Europe Technical Center (HMETC)
London Economics
iv The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe
Executive summary
Executive summary
Key findings
Almost 317,0001 people owe their jobs to the presence of Hyundai
and Kia in Europe
Including customs duties, sales and income taxes, Hyundai and Kia
contributed €2.1 billion in taxes to European governments in 2012
In 2012, the majority (55%) of Hyundai and Kia cars sold in Europe
were produced in Europe
Hyundai and Kia are directly responsible for value added of almost
€5 billion across the areas of manufacturing, supplies, research &
development and sale & distribution
The additional value added produces a further €15 billion in output
and 244,000 jobs through the output multiplier
The report
This report is a revised and updated edition of the study entitled “the economic and societal
benefits deriving from the presence of Hyundai and Kia in Europe”, dated February 2013. The
report draws on new data covering the period 2012 and uses a refined data collection approach to
improve the accuracy and reliability of the impact data assembled in the first version. The focus is
on the direct and indirect contribution of the European operations of Hyundai and Kia to GDP,
employment and tax revenues in the EU. It also comments on aspects of the wider social
contributions made by Hyundai and Kia through various programmes in promoting education,
entrepreneurship and social initiatives.
The data for the report was provided during July and August 2013 by the Hyundai and Kia
subsidiaries in Europe, namely the manufacturing operations in the Czech Republic (HMMC) and in
Slovakia (KMS); the group technical centre in Germany (HMETC); as well as the European
distributors of the two brands (HME and KME) and each brand’s sales companies in the individual
Member States.
1
Figures presented in the Executive summary are rounded. Where available, the precise (unrounded) figures are provided within the
report. Any summations or calculations are based on the unrounded figures.
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe v
Hyundai Motor Group at a Glance
The economic context
As of September 2013, the economic situation in the EU remains fragile. While real GDP
increased during the second quarter of 2013, overall real GDP is still expected to decrease
by 0.1% in 2013, with positive annual GDP growth expected to return by 2014 only.
Growth continues to rely substantially on exports, which enhances the role of export-
oriented industries such as automotive manufacturing.
The automotive industry is:
a direct employer of a large and highly-skilled workforce, with an even larger
effect on overall employment through the multiplier effect on jobs along the
automotive value chain;
a major contributor to exports, the crucial source of growth over the foreseeable
future;
a magnet for foreign direct investment (FDI);
a vital source of innovation and technology development.
A growing presence in Europe
Hyundai and Kia are two success stories at the heart of the European automotive industry.
Hyundai and Kia are increasing their market in Europe: the number of Hyundai
vehicles sold in Europe has almost doubled since 2008, whilst the number of Kia
vehicles sold has increased by over two-thirds.
In 2012, Hyundai sales in the EU+EFTA increased by 9.4% and Kia sales by 15.6% as
compared to 2011 while the market overall declined by 7.8%.
Market shares for Hyundai and Kia grew from 2.9% and 2.2% respectively in 2011
to 3.5% and 2.7% respectively in 20122.
In the first half of 2013, the market shares stood at 3.5% for Hyundai and 2.8% for
Kia with the EU market overall having declined by 6.6%.
Manufacturing cars in Europe
Hyundai and Kia have invested in two large manufacturing facilities in the EU, one in the
Czech Republic (Nošovice) and one in Slovakia (Žilina).
The majority (55%) of Hyundai and Kia cars sold in the EU are produced locally in the
Czech Republic and Slovakia.
Manufacturing output in the two European plants is increasing rapidly:
Hyundai Motor Manufacturing Czech (HMMC) produced 303,035 vehicles in 2012,
up by 20.2% over 2011-12 (from 251,000 units to 303,035 units).
2
ACEA New Passenger Car Registrations, Press Release 16 January 2013.
London Economics
vi The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe
Executive summary
This compares to the Toyota, Peugeot, Citröen (TPCA Czech s.r.o.) plants in the
Czech Republic, which scaled back production by 26% over 2011-12, and the Škoda
(Škoda Auto a.s.) plant, the largest in the Czech Republic, which reduced
production by 2.6% over the same period.
The increase in production at HMMC represented the largest yearly increase of all
Hyundai plants.
Kia Motors Slovakia (KMS), one of the few plants in the world that has the capacity
to manufacture up to eight different models on the same line, increased plant
production over 2011-12 by 15%.
Creating jobs and wealth in Europe
Employment
The workforce employed directly by Hyundai and Kia and supported by their operations in
the upstream and downstream markets consists of 73,000 individuals.
In addition, 244,000 European workers are employed due to demand induced by the
presence of Hyundai and Kia.
In total, 317,0003 people owe their jobs to the presence of Hyundai and Kia in Europe.
The companies making up the operations of Hyundai and Kia in the European Union have
a variety of training programmes to develop, maintain and enhance employees’ skills over
a broad range of specialisations. All provide formal training.
Tax revenues
Including customs duties, sales and corporation taxes, Hyundai and Kia contribute a total
of almost €2.1 billion in taxes to European governments.
Value added along the value chain
The Hyundai and Kia factories produce gross value added (GVA) of €1.0 billion from a
turnover of €7.7 billion and provide high-quality employment to 7,304 full-time staff and
agency workers.
They purchase car part supplies worth €6.8 billion, €4.6 billion of which (67%) is
sourced from within Europe.
They purchase non-car part supplies worth €178 million, all of which are sourced
locally.
3
This figure is derived by summing the number of employees directly involved in Hyundai and Kia entities (72,542), and the number of
employees derived by the multiplier (244,228), and rounding to the nearest thousand.
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe vii
Hyundai Motor Group at a Glance
Demand by Hyundai and Kia provides employment for 22,500 people in the supplier
industry (including both automotive parts and other supplies), whose additional gross
value added is estimated at over €1 billion.
The entire value chain, from R&D to distribution, can be found within Europe. Hyundai and
Kia have a sales distribution network covering all EU Member States and EFTA countries.
The sales and distribution network adds an additional €2.9 billion to European
GDP4, whilst the R&D facility adds an additional €32 million.
The commitment of Hyundai and Kia to Europe is ongoing, with a €5.5 million investment
to build a new vehicle test centre in Germany announced in January 2013 by Hyundai, and
with the recent completion of a dedicated research and development centre for Kia in
Europe.
The combined GVA of Hyundai and Kia amounts to €5 billion. GVA may be seen as an
economic entity’s contribution to gross domestic product and is the value of the goods
and services produced by the company net of input costs (or output minus intermediate
consumption).
This figure includes the GVA of external suppliers and independent retailers of the
two brands.
This is equivalent to about 2.7% of the increase in EU GDP in 2012.
The additional output generated by Hyundai’s and Kia’s activities in Europe throughout
the economy amounts to €15 billion. This figure is based on an estimated multiplier of
three for the automotive industry5.
Given that the European economy supports one job per €61,100 of GDP on
average, the €15 billion in output induced by Hyundai and Kia through a multiplier
of three supports 244,000 jobs.
Social contributions
Hyundai and Kia have initiated and continue to support financially and in other ways a
wide variety of local and national projects focusing on social, environmental and
educational issues.
This includes:
‘Skills for the Future’, Hyundai Motor Europe’s first pan-European
programme launched in 2012 and run jointly with Junior Achievement-
Young Enterprise (JA-YE) Europe, aiming to improve youth employability
‘Brilliant Entrepreneurs’ designed to stimulate entrepreneurship amongst
European university students.
4
GDP is the market value of goods and services produced in a country within a specified period of time.
5
For the methodology underpinning use of this multiplier, see Haugh, D., Mourougane, A. and Chatal, O. (2010). ‘The automobile
industry in and beyond the crisis’. OECD Economics Department Working Paper No. 745. Available at: http://bit.ly/ZlneSQ [accessed
09 August 2013].
London Economics
viii The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe1 │ Background and context
1 Background and context
1.1 The economic context
The European economy is only slowly emerging from the recession triggered by the 2008 financial
crisis. The situation remains fragile. The latest figures suggest that, whilst economic activity is
picking up, leading to an increase in real GDP during the second quarter of 2013, real GDP is still
expected to decrease by 0.1% in 2013 overall, with positive annual GDP growth expected to
return by 2014 only.
Figure 1: Real GDP growth rate (percentage change on previous quarter), EU27
1.5 1.0
Real GDP growth rate (percentage
1.0 0.5 0.3 0.5 0.5 0.7
change on previous year)
0.5 0.5 0.0
0.3 0.2 0.0 0.3
0.0 -0.1
-0.3 0.2 -0.3
-0.5 -0.2 -0.5
-0.7
-1.0 -0.4
-1.5
-1.8
-2.0
-2.5
-2.7
-3.0
Years
Source: Eurostat
As a result of the slow recovery, unemployment remains high in many Member States. The
European Commission6 expects unemployment to reach around 11% in the EU in 2013 and to
remain at this level in 2014.
The economic forecasts underline the important role played by large-scale, high-tech
manufacturing operations in providing high-quality, stable and sustainable employment and
adding value to the European economy.
1.2 The automotive sector in Europe
“The EU is the world's largest producer of motor vehicles. The automotive
industry is therefore central to Europe's prosperity. It is a huge employer of
skilled workforce and a key driver of knowledge and innovation. It represents
Europe's largest private investor in research and development (R&D). It also
makes a major contribution to EU's Gross Domestic Product (GDP), and exports
far more than it imports.”
European Commission DG Enterprise and Industry7
6
EC DG Ecfin Spring Economic Forecast. Available at: http://bit.ly/16xvXEw [accessed 09 August 2013].
7
Available at: http://bit.ly/O5ydcD [accessed 22 August 2012].
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe 11 │ Background and context
The automotive sector is of strategic importance to the EU economy and provides a unique
contribution to Europe’s economic wellbeing. Specifically, the European automotive industry:
is a direct employer of a large and highly-skilled workforce;
has an even larger effect on overall employment through the multiplier effect on jobs
along the automotive value chain;
is a major contributor to exports, the crucial source of growth over the foreseeable
future;
is a magnet for foreign direct investment (FDI);
is a vital source of innovation and technology development.
On the international scale, the sector is a major contributor to Europe’s economic strength:
Europe accounted for 24% of world car production in 2012. The European Commission reports
that vehicle production showed a positive trade balance of €45 billion in the first five months of
2012, largely due to exports to the US and emerging markets8.
Moreover, the sector is dynamic and highly innovative. The industry invests €26 billion, or 5% of
turnover, in R&D every year, which rises to €32.8 billion when including trucks, commercial
vehicles and parts. The focus of innovation is on improving fuel efficiency and introducing further
electronic systems into cars. The fuel efficiency aim encompasses several strategies, principally
lithium-ion batteries, hydrogen fuel-cells, biofuels and improvements to conventional engines.
Electronic systems innovation centres on navigational systems to reduce congestion, driverless
cars and systems designed to increase fuel economy. The latest figures show that the automotive
industry filed 9,541 patents in 20129.
The importance of exports and FDI for the European economy has further increased over recent
years, given the collapse in spending by consumers, government and domestic businesses.
Expenditure by the government sector is likely to fall, and together with the erosion of consumer
incomes, this leaves the export sector offering the only growth viable prospects over the
foreseeable future. The role of the car industry as an export motor is thus enhanced even further.
The trade surplus of Europe’s car industry stands at €92 billion for 2012, which is distributed
across the 16 Member States that have automotive sectors. The largest beneficiaries by value are
still in the big-5 economies (DE, FR, ES, IT, UK), but relative to the size of the national economy, the
automotive sector is also pivotal in central European countries like Hungary, Slovakia and the
Czech Republic. Of the 252,000 vehicles made by Hyundai in 2011, 44,400 (18%) were exported
outside the EU/EFTA. Slovakia and the Czech Republic, in particular, have a large and thriving
automotive sector, which places them at the top in Europe in terms of motor vehicle production
relative to size, with both producing over 100 cars per head. Slovakia saw an increase in motor
vehicle production by 40.7% between 2011 and 201210.
8
CARS 2020 Action Plan. Available at: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52012DC0636:EN:NOT
9
ACEA Pocket Guide 2013, p. 25 (latest version as of October 2013).
10
OICA is the International organisation of Motor Vehicle Manufacturers.
London Economics
2 The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe1 │ Background and context
Figure 2: Motor vehicle production per 1,000 inhabitants, 2012
Note: *only car production available in 2012.
Source: ACEA Pocket Guide, 2013
Figure 3: Direct employment in the automotive sector, EU27 (2008-2012)
4,500
4,300
4,077
4,100
Total employment, ages 15-64 ('000s)
3,947
3,891
3,900 3,882
3,925
3,700
3,500
3,300
3,165 3,043
3,100
3,011
2,900
2,879 2,844
2,700
2,500
2008 2009 2010 2011 2012
Years
Manufacture of motor vehicles, trailers and semi-trailers
Wholesale and retail trade and repair of motor vehicles and motorcycles
Source: Eurostat (LFS)
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe 31 │ Background and context
The automotive industry provides high-quality manufacturing jobs, both for skilled and semi-
skilled manual workers and for highly-skilled engineers and management professionals. A detailed
study of the European automotive sector11 that was completed in 2008 found that manual workers
still represent the bulk of the workforce in most countries: around 60% in the EU15 and over 70%
in the new Member States, but also in Spain12. Overall, the study found that the relative number of
managers, engineers and other professionals and technicians increases over time compared with
the number of manual workers. However, skilled manual jobs are still in demand, with the
increasing use of information technology in cars increasing the need for electricians and
electronics specialists, for example. The automotive industry has been a crucial factor in
maintaining employment levels during the recent economic crisis (Figure 3), in a number of
countries.
According to Eurostat, approximately 3.88 million people were employed in ‘automotive trade’
and approximately 3.01 million in ‘automotive manufacturing’ in 2012, which means a total of 6.9
million people were directly employed by the automotive sector in 2012. This compares to a total
of 5.2 million directly employed in the finance and insurance sector13, and 1.2 million in the
telecommunications sector14, for example.
1.3 Hyundai and Kia in the EU
Globally the Hyundai Motor Group (HMG) is composed of companies and affiliates active across a
range of different business sectors. The automotive sector, made up of companies using the
Hyundai and Kia names, is the most significant in terms of Group revenue and profit. In 2012, the
Group sold 7.12 million vehicles worldwide, an increase of around 8% from 201115. Despite the
economic slump, the Group is expected to sell 7.41 million cars during 2013, which is likely to
further strengthen its status as a leading global automaker. With 30 factories across nine
countries, the Group’s global network and presence is significant.
It is therefore no surprise that Hyundai and Kia are two success stories at the heart of the
European automotive industry. In 2012 Hyundai sales in the EU+EFTA increased by 9.4% and Kia's
by 15.6% while the market overall declined by 7.8% as compared to 2011. Market shares for
Hyundai and Kia grew from 2.9% and 2.2% respectively in 2011 to 3.5% and 2.7% respectively in
2012.16
Consumer success has been driven by very significant investments, and exceeding customer
expectations has in turn stimulated further investment. Major facilities are located in three
Member States. Design and R&D and sales and marketing headquarters are in Germany and
manufacturing is in the Czech Republic and Slovakia. These represent significant continuing
investment in Europe.
11
Loire et al. (2008).
12
2007 data. See Loire et al. (2008), p. 63.
13
Eurostat (LFS) NACE Rev.2 ‘Financial service activities, except insurance and pension funding’ + ‘Activities auxiliary to financial services
and insurance activities’, 2012 (latest available figure).
14
Eurostat (LFS) NACE Rev. 2 ‘Telecommunications’, 2012 (latest available figure).
15
http://europe.chinadaily.com.cn/business/2013-01/02/content_16076354.htm
16
ACEA New Passenger Car Registrations, Press Release 16 January 2013.
London Economics
4 The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe1 │ Background and context
The centrepieces of the companies’ investment in Europe are the manufacturing facilities in
Žilina, Slovakia and Nošovice, Czech Republic. Investment by Hyundai and Kia has been
instrumental in making the Czech Republic and Slovakia the world's top two producers of cars per
capita17.
1.3.1 HMMC
Hyundai opened its European flagship plant, Hyundai Motor Manufacturing Czech (HMMC) in
November 2008 following a €1 billion investment. The plant produced approximately 303,035
vehicles in 2012, up by 20.2% over 2011-12 (from 251,000 units to 303,035 units). The increase in
production at HMMC represented the largest yearly increase of all of the Hyundai plants18. This
expansion saw a resulting increase in turnover from €3.2 billion in 2011 to €3.7 billion in 2012 (an
increase of 16%).
1.3.2 KMS
HMMC is located 90 kilometres north of Kia Motors' Žilina Plant in Slovakia (KMS), which opened
in April 2007. It is one of the few plants in the world that has the capacity to manufacture up to
eight different models on the same line.
KMS represented 10.7% of global plant production in 201219, equating to 292,050 cars. The growth
rate in plant production over 2011-12 was 15%20. Employment numbers are forecast to increase by
100 over 2013-1421.
The majority (55%) of Hyundai and Kia cars sold in the EU are produced locally in Slovakia and the
Czech Republic.
1.3.3 R&D
Research and development takes place in Hyundai Motor Europe Technical Center, a high-tech
multifunctional building located in Rüsselsheim near Frankfurt, Germany22.
In 2012, almost 95% of the 444,000 Hyundai cars sold in Europe were designed and engineered in
Rüsselsheim, including the European best-sellers i30, ix35 and i40.
In addition, construction of a new Hyundai vehicle test centre at the Nürburgring race track in
Germany was announced in January 2013. The new facility represents a €5.5 million investment.
Tests carried out at the new facility will be used by engineers at the company’s existing R&D
centre in Rüsselsheim to improve the quality and driving performance of Hyundai’s European-
designed vehicles.
17
ACEA New Passenger Car Registrations, Press Release 16 January 2013.
18
Hyundai Motors Corporation Annual Report, 2012.
19
Kia Motors 2012 Annual Report, page 5.
20
Kia Motors Slovakia 2012 Annual Report, page 9.
21
Ibid.
22
Hyundai Motor Company Annual Report 2011, p. 33.
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe 52 │ Contribution to employment and GDP
Against this background, this report is aimed at highlighting the contribution of Hyundai and Kia in
a number of dimensions:
contribution to employment and GDP;
training and development of the labour force;
total tax contributions; and
wider social contributions.
Unless otherwise specified, the data used in the following sections was provided by the different
operating entities of Hyundai and Kia in Europe.
2 Contribution to employment and GDP
The following tables illustrate the contribution of Hyundai and Kia to the EU economy. The
selected indicators are:
turnover;
gross value added (GVA);
employment; and
wages and salaries.
The tables are based on data supplied by the different Europe-based Hyundai and Kia entities and
comparison data from European statistical office (Eurostat). The analysis distinguishes the impact
of Hyundai’s manufacturing, R&D, distribution and retail activities.
2.1 Manufacturing
Hyundai and Kia operate two manufacturing facilities in the EU, one in the Czech Republic
(Nošovice) and one in Slovakia (Žilina). Hyundai and Kia produce value added of over €1 billion
from a turnover of €7.7 billion and provide high-quality employment to 7,304 staff. The increase in
GVA of almost 30% compared with the previous year coincides with the implementation of a
‘three-shift’ operation at HMMC in 2012, which increased the number of cars produced.
Table 1: Impact of Hyundai/Kia manufacturing
1) 2)
Indicator Hyundai Kia Total HMG Total HMG as
(Hyundai + Kia) manufacture % of
of motor EU27
vehicles
3)
(EU27)
7)
Turnover (€) 3,666,635,930 3,988,682,966 7,655,318,896 600,231m 1.3%
4)
Gross value added (€) 528,995,706 477,474,289 1,006,469,995 90,000m 1.1%
5)
Employment 3,415 3,889 7,304 1,034,500 0.7%
6)
Wages & salaries(€) 52,679,709 68,589,362 121,269,071 58,000m 0.2%
Note: (1) Nošovice plant (CZ) (2) Žilina plant (SK) (3) Eurostat Structural Business Statistics (SBS) (NACE Rev.2), 2010 (4) Eurostat SBS =
value added at factor cost, Hyundai value is from HMMC Annual Report 2012 (5) Eurostat SBS = number of persons employed (2009
data) (6) Eurostat SBS = personnel costs (2010 data) (7) Eurostat is 2011 data.
Source: Hyundai/Kia, Eurostat (SBS)
London Economics
6 The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe2 │ Contribution to employment and GDP
2.1.1 Regional impact in Slovakia and the Czech Republic
The impact of the HMMC and KMS manufacturing operations on the national and regional
economies of the Czech Republic and Slovakia continues to be considerable. Hyundai represents
around 10% of employment in the ‘manufacturing of motor vehicles’ sector in the Czech
Republic. KMS represents almost 30% of the employment in the ‘manufacturing of motor
vehicles’ sector in Slovakia.
Table 2: Hyundai/Kia share of national and regional (NUTS 2) employment1)
Kia Slovakia Stredné Slovensko
Employment 3,889 2.3m 563,700
Kia % 100% 0.17% 0.69%
Hyundai Czech Republic Moravskoslezsko
Employment 3,415 4.8m 537,400
Hyundai % 100% 0.07% 0.64%
Note: 1) total employment (2012) for individuals aged 15 to 64 years.
Source: Hyundai/Kia, Eurostat (LFS)
96% of HMMC employees live in the Moravian-Silesian region, which demonstrates the impact
that HMMC has on the regional economy in terms of creating jobs for local people and sustaining
the local economy. This ensures that the wages paid out by the plant are spent in the local
economy, which helps to create and sustain further jobs in the region. HMMC increased its share
of GDP in the Moravskoslezský kraj region over 2011-12 by 30% or 0.8 percentage points23.
23
HMMC’s share of GDP in the Moravskoslezský kraj in 2011 was 2.72%, whereas the share in 2012 was 3.53%. Both numbers were
calculated using the Eurostat NUTS 3 2010 GDP value for Moravskoslezský kraj, and both gross value added numbers were taken
from HMMC’s 2012 Annual Report.
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe 72 │ Contribution to employment and GDP
Table 3: Hyundai/Kia share of national and regional (NUTS 2) number of persons employed in
manufacture of motor vehicles
Kia Manufacture of motor Manufacture of motor
1)
vehicles in Slovakia vehicles in Central
Slovakia
Number of persons 3,889 13,654 3,889
employed
Kia % 100% 28% 100%
Hyundai Manufacture of motor Manufacture of motor
vehicles in Czech vehicles in Moravia-
2)
Republic Silesia
Number of persons 3,415 34,360 3,415
employed
Hyundai % 100% 10% 100%
Note: (1) Eurostat NACE Rev. 2 industry classification is ‘manufacture of motor vehicles’ and the data is 2011 (latest available figure). (2)
Eurostat NACE Rev. 2 industry classification is ‘manufacture of motor vehicles’ and the data is 2011 (latest available figure).
Source: Hyundai/Kia, Eurostat (SBS), ACEA, Czech Invest
Table 4: Hyundai/Kia share of national and regional (NUTS 3) GDP1)
Kia Slovakia* Žilinský kraj*
GVA/GDP* €477,474,289 €65.9bn €7.5bn
Kia % 100% 0.72% 6.37%
2)
Hyundai Czech Republic Moravskoslezský kraj
GVA/GDP* €528,995,706 €150.3bn €15.0bn
Hyundai % 100% 0.35% 3.53%
Note: (1) GDP at current prices by NUTS 3 regions, 2010 (latest available year). (2) This is the same as the NUTS 2 region
“Moravskoslezsko”. * Hyundai and Kia GVA are compared with regional GDP. * figures rounded to the nearest million.
Source: Hyundai/Kia, Eurostat
2.1.2 Suppliers (car parts)
The Hyundai and Kia manufacturing operations are major customers of the automotive supply
industry, including at the national level in Slovakia and the Czech Republic, on the European level,
and internationally. Together, they purchase supplies worth €6.8 billion, €4.6 billion of which
(67%) is sourced from within Europe.
Data on GVA, employment and wages at the independent enterprises that supply the inputs used
in the manufacturing plants operated by Hyundai and Kia were not available for this study. To
estimate the impact of Hyundai and Kia on these variables, we assume that the impact is
proportional to the fraction of supplier sales that are accounted for by Hyundai and Kia purchases.
London Economics
8 The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe2 │ Contribution to employment and GDP
This means that, if Hyundai and Kia purchases are responsible for 50% of the sales of a supplier
firm, we assume that 50% of the employment at that firm is also directly attributable to the
demand from Hyundai and Kia24.
Hence – assuming the impact on the supplier base is proportional to the overall magnitude of the
purchases by Hyundai and Kia from European manufacturers of parts and accessories for motor
vehicles, i.e. 2.2% – the direct effects include the employment of almost 22,000 people in the
supplier industry as well as additional gross value added (and hence a GDP contribution) of almost
€1 billion.
Table 5: Impact of Hyundai/Kia car parts suppliers
2)
Indicator Hyundai Kia suppliers Total HMG Total HMG as
1)
suppliers suppliers manufacture % of
(Hyundai + Kia) of parts and EU27
accessories
for motor
vehicles
3)
(EU27)
7)
Turnover (€) 2,005,535,770 2,570,077,901 4,575,613,671 211,000m 2.2%
4)
Gross value added (€) 436,891,710 559,873,200 996,764,910 45,965m 2.2%
5)
Employment 9,598 12,300 21,898 1,009,800 2.2%
6)
Wages & salaries(€) 306,307,379 392,530,434 698,837,813 32,226m 2.2%
Note: Figures rounded to the nearest integer. Rounding occurs through estimation procedures as explained in footnote 24. Hyundai and
Kia figures for gross value added, employment and wages & salaries are imputed assuming that GVA, employment and wage payments
by the European suppliers to Hyundai and Kia are proportional to their share of the of the industry’s turnover in the EU (=2.2%). The
values are allocated Hyundai and Kia according to their share in EU purchasing expenditures (Hyundai = 44%, Kia = 56%) (1) purchases
from suppliers for the Nošovice plant (2) purchases from suppliers for the Žilina plant (3) Eurostat SBS (NACE Rev.2), 2010 (4) Eurostat
SBS = value added at factor cost (2010 data) (5) Eurostat SBS = number of persons employed (2009 data) (6) Eurostat SBS = personnel
costs (2010 data) (7) Eurostat data is 2011 (latest available year). Hyundai and Kia figures are the reported purchases (costs) of supplies
by Hyundai and Kia, which can be equivalently expressed as the turnover of suppliers that can be attributable to Hyundai and Kia
purchases.
Source: Hyundai/Kia, Eurostat (SBS)
24
The figures for GVA, employment and wages and salaries in Table 5: Impact of Hyundai/Kia car parts suppliers are derived as
follows: first, we take the value of the supplies purchased by the Hyundai and Kia manufacturing plants within Europe. This is
assumed to be equal to the turnover of automotive suppliers in Europe that can be attributable to the presence of Hyundai and Kia.
Dividing this by the total turnover of the sector (“manufacture of parts and accessories for motor vehicles”) in the EU27 yields a
contribution of 2.2% from Hyundai and Kia. By multiplying the EU-totals for GVA, employment and personnel costs in the sector by
2.2% (the proportion assumed to be attributable to demand by Hyundai and Kia), we derive an estimate of the combined EU-wide
impact of Hyundai and Kia int he supplies part of the value chain (column 4). The estimated figures for the two brands combined
are divided again by assuming the contribution of each is proportional to the fraction of sales attributable to them. The figures
presented in the table are rounded to full integers (or one decimal in the case of the percentage figure).
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe 92 │ Contribution to employment and GDP
Table 6: Regional employment resulting from Hyundai/Kia supply purchases: share of national
and regional employment1)
Europe* Slovakia* -
Kia employment 12,300 8,163 -
(1)
Kia % 1.22% 0.35% -
(4)
Hyundai* Czech Republic* Moravskoslezsko*
Hyundai employment 9,598 7,229 5,496
(2) (3) (4)
Hyundai % 0.95% 0.15% 1.02%
Note: *The number of employees attributable to Hyundai/Kia demand in each region is calculated using the total purchases of supplies
data, in the same way as in Table 5 above). It is assumed that the share of total employment in the NACE sector 'total manufacture of
parts and accessories for motor vehicles' is equal to the share of turnover of purchases in the EU NACE sector for that country/region.
For KMS, no sub-national breakdown was provided. All national and regional employment data is Eurostat LFS (2012) total employment
for individuals aged 15 to 64 years. (1) This is the share of total EU employment in the NACE sector (=1,009,800) that Kia’s supply
purchases is responsible for (2) This is the share of total EU employment in the NACE sector (=1,009,800) that Hyundai’s supply
purchases is responsible for. (3) This is the share of total employment in the Czech Republic (=4,810,400) that Hyundai’s supply
purchases in the Czech Republic is responsible for. Supplies are purchased from three suppliers in Nosovice, four suppliers in Ostrava
and one supplier in Oterakovice. (4) This is the share of employment in the Moravskoslezsko region (=537,400) that Hyundai’s supply
purchases is responsible for. The Moravskoslezsko region is the lowest level of regional employment data available from Eurostat.
Supplies are purchased from three suppliers in Nosovice, and four suppliers in Ostrava.
Source: Hyundai/Kia, Eurostat (LFS)
2.1.3 Suppliers (non-parts)
In addition to car parts, HMMC and KMS purchase non-auto supplies from 1,456 businesses in the
Czech Republic and Slovakia. These purchases include subsidiary materials such as paints and oils,
heavy-duty equipment such as robots, and other peripheral equipment such as office supplies. All
of Hyundai and Kia’s non-auto supplies are locally sourced from the Czech Republic and Slovakia
respectively, significantly benefitting the local economy. Together, HMG purchases €178 million
worth of non-auto part supplies, producing an estimated extra €21 million in gross value added.
Table 7: Impact of Hyundai/Kia non-parts suppliers
1) 2)
Indicator Hyundai suppliers Kia suppliers Total HMG suppliers
(Hyundai + Kia)
Turnover (€) 82,467,525 95,700,000 178,167,525
3)
Gross value added (€) 9,752,091 11,316,880 21,068,971
4)
Employment 288 334 623
5)
Wages & salaries(€) 6,195,467 7,189,572 13,385,039
Note: Figures for GVA, employment and wages & salaries are imputed assuming that GVA, employment and wage payments by the
European non-parts suppliers to Hyundai and Kia are proportional to their share of the of the industry’s turnover in the EU27 NACE
sector G: Wholesale and retail trade; repair of motor vehicles and motorcycles (=0.002%). The values are allocated to Hyundai and Kia
according to their share in EU purchasing expenditures (Hyundai = 46%, Kia = 54%) (1) purchases from non-auto parts suppliers for the
Nošovice plant, and includes subsidiary materials such as paints, oils and refrigerant; and equipment such as robots and office supplies
(2) purchases from non-auto parts suppliers for the Žilina plant (3) Figures for Hyundai and Kia are imputed using Eurostat SBS = value
added at factor cost (2009 data) and the turnover share that the HMG non-auto parts suppliers represents in the EU NACE sector
(=0.002%) (4) Figures for Hyundai and Kia are imputed using Eurostat SBS = number of persons employed (2010 data) and the turnover
share that the HMG non-auto parts suppliers represents in the EU NACE sector (=0.002%) (5) Figures for Hyundai and Kia are imputed
using Eurostat SBS = personnel costs (2010 data) and the turnover share that the HMG non-auto parts suppliers represents in the EU
NACE sector (=0.002%).
Source: Hyundai/Kia, Eurostat (SBS)
London Economics
10 The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe2 │ Contribution to employment and GDP
2.2 Sale and distribution
Both Hyundai and Kia maintain extensive distribution and dealership networks throughout the
European Union. The total GVA contribution of Hyundai's and Kia's dealership and distribution
network is almost €3 billion, and turnover is €36 billion. The network sustains over 40,000
employees.
Table 8: Impact of Hyundai/Kia sale and distribution
1) 2)
Indicator Hyundai Kia Total HMG Total sale of HMG as
(Hyundai + Kia) cars and light % of
motor EU27
vehicles
3)
(EU27)
Turnover (€)
7)
18,163,822,422 17,811,749,627 35,975,572,049 679,117m 5.30%
Gross value added (€)
4)
1,353,542,238 1,562,991,165 2,916,533,403 59,593m 4.89%
5)
Employment 23,601 18,881 42,483 1,398,600 3.04%
Wages & salaries(€)
6)
898,365,655 622,290,611 1,520,656,267 41,532m 3.66%
Note: (1) Distribution and dealership data was provided by Hyundai for the following countries: Austria, Denmark, Finland, Ireland, Italy,
Netherlands, Romania, Slovakia, Slovenia, Sweden and UK. Distribution data only was provided for the following countries: Belgium,
Bulgaria, Cyprus, the Czech Republic, France, Germany, Greece, Hungary, Poland, Portugal and Spain. For these countries, the figures
for dealerships were estimated using Eurostat (2010 data) ‘per enterprise’ value for the indicator in the NACE Rev.2 sector ‘sale of cars
and light motor vehicles’, multiplied by the number of dealerships in that country provided by HME. Due to lack of Eurostat data, the
Eurostat (2010 data for all indicators except for value added, which uses 2009 data) EU27 per enterprise value was used to estimate
dealerships for the following countries: the Czech Republic, Ireland, Greece, Spain and Malta. (2) Figures for distribution, with the
exception of turnover, were provided by Kia; values for dealerships for each of the indicators was estimated using the Eurostat EU27
‘per enterprise’ value for the indicator, multiplied by the number of Kia dealerships provided by Kia (2,021). (3) Eurostat SBS (NACE
Rev.2) (2010 data); figures rounded to nearest million (4) Eurostat SBS = value added at factor cost (2009 data); Hyundai dealerships’
GVA is estimated for the countries listed in note (1) by multiplying the Eurostat (2009) GVA per enterprise in the NACE sector, by the
number of dealerships in the country provided by HME. Hyundai GVA data for the following countries was taken from the first edition
of the report: Denmark, Netherlands, Slovenia and UK. Distribution data is missing for the following countries: Austria, Bulgaria, Cyprus,
Finland, Ireland and Portugal. Kia dealerships’ GVA is assumed to be equal to the average GVA per enterprise in the NACE sector =
€327,236 (5) Eurostat SBS = number of persons employed; Hyundai dealerships’ employees is estimated for the countries listed in note
(1) by multiplying Eurostat (2010) number of persons employed per enterprise in the NACE sector, by the number of dealerships in the
country provided by HME. To compute the number of dealers’ employees for Kia, we assumed the same number of dealers’ employees
per dealer as for Hyundai in the first edition of the report (8.7), multiplied by the number of Kia dealers (2,021) (6) Eurostat SBS =
personnel costs (2010 data); Hyundai dealerships’ wages & salaries is estimated for the countries listed in note (1) by multiplying the
Eurostat (2010) personnel costs per enterprise in the NACE sector, by the number of dealerships in the country provided by HME.
Wages & salaries for the Kia national/European distribution was provided by Kia; no data available on wages & salaries paid by Kia
dealers; wages & salaries of Kia dealership employees were assumed to be equal to the EU average for employees in the NACE sector =
€29,678. (7) Eurostat 2010 data. Hyundai dealerships’ turnover is estimated for the countries listed in note (1) by multiplying the
Eurostat (2010) turnover per enterprise in the NACE sector, by the number of dealerships in the country provided by HME. Hyundai
turnover data for the following countries was taken from the first edition of the report: Denmark, Netherlands, Slovenia and Hungary.
Distribution data is missing for the following countries: Austria, Bulgaria, Cyprus, Finland, Ireland and Portugal. Kia dealerships and
distribution revenue combined is calculated assuming that Kia’s turnover share of the total EU NACE sector is equal to that of GVA.
Source: Hyundai/Kia, Eurostat (SBS)
2.3 Research and development
Hyundai Motor Europe Technical Center (HMETC) is a research and development establishment
servicing the needs of both brands. It is small in terms of its immediate contribution to the
economy as measured by employment and value added. However, the Center produces significant
intangible benefits to the European economy such as knowledge spillovers and productivity
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe 112 │ Contribution to employment and GDP
spillovers; defined as stimulating further innovation through knowledge-sharing. Gross value
added for HMETC increased over 2011-12 by 7.2%.
Table 9: Impact of Hyundai/Kia research and development
1)
Indicator Hyundai/Kia research and development
6)
Turnover (€) 54,161,712
3)
Gross value added (€) 32,183,126
4)
Employment 235
5)
Wages & salaries(€) 23,400,000
Note: (1) Figures relate to the joint Hyundai Motor Europe Technical Center.
Source: Hyundai/Kia
In addition, a new facility was officially opened in September 2013 on Nürburgring as part of the
HMETC operation. It represents a €6.6 million investment and will allow for the testing on the
Nürburgring of Hyundai and Kia vehicles. This demonstrates HMG’s commitment to vehicle
innovation, development, testing and safety.
2.4 EU-wide impact on GDP and employment
The contribution to GDP is measured by the combined GVA of the different activities undertaken
by Hyundai and Kia in Europe25. Our calculations show that the value added amounts to €5 billion.
A 2010 OECD study26 puts the output multiplier of the automobile industry27 at close to three in G7
countries. The multiplier is calculated using input-output tables and combines information on both
domestic and import inter-sectoral linkages. A value of three means that a €1 increase in the value
added delivered by the automobile industry increases economy-wide output by €3. As Haugh et al.
(2010) report, “this level of multiplier is at or close to the top of what is observed in other
industries, and always stronger than the average across industry (which is estimated to be at 2.2)”.
For Hyundai and Kia, this means that the GVA of €5.0 billion in Europe generates output
throughout the European economy of €15 billion, which supports 244,000 jobs throughout the
European economy28. Note that we use a multiplier that is calculated for the automotive industry
as a whole, i.e. including design, testing, manufacturing and sales. While it is likely that certain
activities within the automotive value chain have a higher multiplier, we do not attempt to
quantify the precise way in which the multiplier varies across different activities.
The workforce employed directly by Hyundai an d Kia, supported by their operations in the
upstream and downstream markets, is almost 73,000 individuals.
25
Gross value added (GVA) is defined as the revenue net of cost of supplies. GVA represents the additional wealth created by the
different activities undertaken by Hyundai and Kia in Europe.
26
Haugh et al. (2010), p. 6-7.
27
Including their design, testing, manufacturing and sales. Ibid., footnote 2.
28
The EU’s overall GDP of €12.9 trillion supports a workforce of 211.6 million [Eurostat: gross domestic product at (current) market
prices (2012) and Eurostat (LFS): total employment ages 16 to 64 years (2012, latest available figure)]. The employment generated
via the multiplier effect is the product of the induced output of €15 billion and the average number of jobs supported by the EU’s
overall GDP.
London Economics
12 The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe3 │ Training and development of the labour force
Table 10: Combined EU-wide impact of activities by Hyundai and Kia on GDP and employment
Hyundai/Kia activity Gross value added (€) No. of employees
Manufacturing 1,006,469,995 7,304
Suppliers 1,017,833,881 22,521
Sale and distribution 2,916,533,403 42,483
R&D 32,183,126 235
Total 4,973,020,405 72,542
Note: 2011 data; rows do not sum to total due to rounding: figures rounded to the nearest integer. Rounding occurs through estimation
procedures and currency conversion.
Source: Hyundai/Kia
3 Training and development of the labour force
Hyundai and Kia’s European entities provide significant opportunities for training and
development of their employees. This is important for the wider economy because improving
knowledge and skills of the labour force increases efficiency and productivity, which is a key driver
of economic growth. The various organisations that make up the Hyundai and Kia operations in the
European Union have put in place a variety of training programmes to develop, maintain and
enhance employees’ skills over a broad range of specialisms. Separate training programmes exist
for technicians, sales and service staff, HR professionals as well as researchers and managers.
The training provided by Hyundai and Kia can take different forms: from highly specialised, task-
specific training for technicians to training with general applicability. Often the training provided to
Hyundai and Kia employees leads to externally recognised, formal qualifications.
HMMC provided training for 694 new employees through its ‘Entry Course’. A total of 977
employees took part in training contributing to professional qualifications that was required by
law, and 859 employees attended advanced safety training courses29. A further 626 employees
were trained in the fields of leadership and managerial competencies. Other core skills training
included language skills development (116 employees participated) and organised computer
courses (231 employees participated). E-learning courses were also launched in 2012, of which
around 300 employees successfully completed courses. Moreover, 150 workers undertook training
abroad. On average, HMMC provided 15 hours of training per employee in 2012. All employees at
Hyundai’s European plant obtain formal qualifications.
KMS also contributes heavily to employee training and development. In 2012, KMS provided
86,480 training hours to 7,955 employees, equivalent to 11 hours per employee. KMS also
provided training with the parent company in Korea for 1,274 employees.
Kia’s own research and development centre also provided 196 hours of training in total in 2012,
equivalent to six hours per employee.
29
HMMC Internal newsletter, no.55 / January 2013.
London Economics
The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe 134 │ Tax contributions by Hyundai and Kia in Europe
At the European Technical Center, initial training is intensive, with new employees undergoing 56
hours of training. Standard practice is a week-long training programme at the Hyundai Motor
Company headquarters in Korea. Various seminars for improving specific employee skills are
offered on an ongoing basis. HMETC provided an average of five hours of formal training per
employee throughout 2012.
Hyundai’s distribution and dealership network received approximately 16 hours of training per
employee in 201230.
Kia’s distribution network received approximately 53 hours of training per employee31.
Figure 4: Average number of training hours per employee
60
50
40
30
20
10
0
KMS HMMC HMETC HME KME
Source: KMS, HMMC and HMETC data
4 Tax contributions by Hyundai and Kia in Europe
Hyundai and Kia are major contributors to the public finances of EU Member States. The different
activities based in Europe resulted in revenues for the public purse of € 2.1 billion in 2012. To put
this into context, this figure is equivalent to 4.8% of the total net federal tax revenues of Austria32.
30
The lower number, when compared to KME, may be because dealerships undergo less training than distributors.
31
The higher number, when compared to HME, may be because dealerships undergo less training than distributors.
32
€43.8 billion in 2012, see http://wko.at/statistik/jahrbuch/budget-steuereinnahmen.pdf.
London Economics
14 The economic and societal benefits deriving from the presence of Hyundai and Kia in Europe5 │ Contributions to society and corporate social responsibility
Table 11: Tax contributions by Hyundai and Kia in Europe (2012)
Activity Hyundai Kia
1)
Manufacturing €25,837,222 €49,225,207
2)
R&D €14,308,198
3)
Sale and Distribution €1,216,114,883 €809,410,653
Total €2,114,896,163
Note: (1) includes corporate and individual income tax, VAT, road tax, real estate, and customs. (2) includes income taxes on wage
income, social security contribution, income tax, property tax, input VAT, and sales VAT. (3) Includes total income taxes paid; total
payroll taxes and income taxes on wage income paid; sales taxes (VAT, other duties, etc.) paid; import duties on car imports paid and
any other special taxes and levies. The following countries includes distribution taxes only (dealership tax contribution not included):
Belgium, Bulgaria, Cyprus, the Czech Republic, France, Germany, Greece, Hungary, Poland, Portugal and Spain. The following countries
includes distribution + dealership tax contribution combined: Austria, Denmark, Finland, Ireland, Italy, Netherlands, Romania, Slovakia,
Slovenia, Sweden and UK.
Source: Hyundai/Kia
5 Contributions to society and corporate social responsibility
5.1 Hyundai Motor Manufacturing Czech (HMMC)
Through the Hyundai Foundation, an organisation founded by HMMC in collaboration with state
institutions and ecological associations, HMMC distributed €53,464 into the Frýdek-Místek and
Nový Jičín regions across 11 community projects in 2012. The maximum grant assistance is around
€20,00033. Similarly, HMMC contributes to the Hyundai Endowment Fund, established in 2007 to
protect the environment and support the Moravian-Silesian region. HMMC originally contributed
around €800,000 to the fund, which is distributed each year. Projects that receive funding
promote sustainable development in the region, involve citizens in public activities, and promote
protection of the environment. The maximum grant value is usually around €10,000. For example,
one project that received funding in the past year include the “Granny to School” project – which
aimed at involving elderly people in community life and encouraging intergenerational
engagement.
HMMC launched another “Good Neighbour” fund in the autumn of 2012. The Good Neighbour
scheme allows surrounding villages, towns, cities and regions to apply for funding with a view to
supporting “social life in their communities”34. The maximum fund per municipality is around
€2,00035. The funding enables municipalities to organise cultural, social, sports and other events.
For example, some funding went to a primary school that used the money to organise a stage
performance and a floorball tournament.
In addition, on 26 June 2013, HMMC was a partner for the “Together for safer Ostrava” project.
The aim of this project is to increase awareness and teach the local community about safety and
crime prevention. For example, role plays were used to teach visitors how to rescue a person from
a wrecked car, or how to extinguish a burning car. Mini competitions were prepared for children in
order to engage them with the material.
33
Association of Public Benefit Organisations (AVPO), Future Funding of NGO’s.
34
HMMC Internal newsletter, no.55 / January 2013.
35
Ibid.
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